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Asian Markets Update

Author

bily

| Published on

February 6, 2018

A strong early rebound in Asian equities cooled by midday, with large-cap Chinese stocks turning lower and gains crimped in markets such as Hong Kong.

The Shanghai Composite Index SHCOMP, -1.82% was recently down 1.5% and the big-cap CSI 300 fell 1.8%. But the startup-heavy ChiNext index in Shenzhen rose 1.5%, after slumping 5.3% Tuesday to close at a two-year low.

Hong Kong’s H-share index, made up of mainland-based companies that also have stock listed in the city, lost all of its early 3.6% rebound by early afternoon. The benchmark Hang Seng Index HSI, -0.38% recently up 0.2%, after rising as much as 2.9% early on.

The swings come after U.S. stocks staged a big late-day rally following Monday’s rout. That rout fed into Tuesday trading in Asia and Europe.

Earnings growth may slow faster than expected as trade tensions with the U.S. heat up and an anticorruption drive in China’s financial sector intensifies, said David Cui, a strategist at Bank of America Merrill Lynch. He said a flow of capital out of the country may emerge as a risk if the dollar broadly turns around, including versus the Chinese yuan.

Away from China, weakness was also seen in New Zealand, where the NZX 50 stock index NZ50GR, -0.57% closed down 0.6%. Kiwi markets were closed yesterday for a holiday.

Korea’s Kospi SEU, -2.31% , which held up relatively well by falling no more than 1.5% on Monday and Tuesday, was down 1.5% at midafternoon as index heavyweight Samsung 005930, -3.42% slid 2.5%.

Asian stock buying overall slowed by lunchtime.

The Nikkei NIK, +0.16% , which slumped 4.7% Tuesday to fall into correction territory, posted an early 3.4% rebound. But it closed up just 0.2%.

Meanwhile the yen found some footing from an overnight pullback—a stronger currency often weighs on Japan’s export-reliant stock market. The dollar USDJPY, -0.49% was recently at ¥109.25 versus ¥109.70 earlier.

Bond yields continued to rebound Wednesday in Asia after experiencing inflows following Monday’s heavy selling on Wall Street and large declines in Asia yesterday. When Treasury prices rise, yields fall.

Ten-year Treasury yields were recently at 2.78% after falling to 2.65% in Asian trading Tuesday. They almost reached 2.9% on Monday.

Ten-year Treasury yields were recently at 2.80% after falling to 2.65% in Asian trading Tuesday. They almost reached 2.9% on Monday.

Bitcoin BTCUSD, -4.04% was pulling back, recently down around 5% to $7,320.44, according to CoinDesk.

A strong early rebound in Asian equities cooled by midday, with large-cap Chinese stocks turning lower and gains crimped in markets such as Hong Kong.

The Shanghai Composite Index SHCOMP, -1.82% was recently down 1.5% and the big-cap CSI 300 fell 1.8%. But the startup-heavy ChiNext index in Shenzhen rose 1.5%, after slumping 5.3% Tuesday to close at a two-year low.

Hong Kong’s H-share index, made up of mainland-based companies that also have stock listed in the city, lost all of its early 3.6% rebound by early afternoon. The benchmark Hang Seng Index HSI, -0.38% recently up 0.2%, after rising as much as 2.9% early on.

The swings come after U.S. stocks staged a big late-day rally following Monday’s rout. That rout fed into Tuesday trading in Asia and Europe.

Earnings growth may slow faster than expected as trade tensions with the U.S. heat up and an anticorruption drive in China’s financial sector intensifies, said David Cui, a strategist at Bank of America Merrill Lynch. He said a flow of capital out of the country may emerge as a risk if the dollar broadly turns around, including versus the Chinese yuan.

Away from China, weakness was also seen in New Zealand, where the NZX 50 stock index NZ50GR, -0.57% closed down 0.6%. Kiwi markets were closed yesterday for a holiday.

Korea’s Kospi SEU, -2.31% , which held up relatively well by falling no more than 1.5% on Monday and Tuesday, was down 1.5% at midafternoon as index heavyweight Samsung 005930, -3.42% slid 2.5%.

Asian stock buying overall slowed by lunchtime.

The Nikkei NIK, +0.16% , which slumped 4.7% Tuesday to fall into correction territory, posted an early 3.4% rebound. But it closed up just 0.2%.

Meanwhile the yen found some footing from an overnight pullback—a stronger currency often weighs on Japan’s export-reliant stock market. The dollar USDJPY, -0.49% was recently at ¥109.25 versus ¥109.70 earlier.

Bond yields continued to rebound Wednesday in Asia after experiencing inflows following Monday’s heavy selling on Wall Street and large declines in Asia yesterday. When Treasury prices rise, yields fall.

Ten-year Treasury yields were recently at 2.78% after falling to 2.65% in Asian trading Tuesday. They almost reached 2.9% on Monday.

Ten-year Treasury yields were recently at 2.80% after falling to 2.65% in Asian trading Tuesday. They almost reached 2.9% on Monday.

Bitcoin BTCUSD, -4.04% was pulling back, recently down around 5% to $7,320.44, according to CoinDesk.

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